It's New York by next year for Best Buy.
Although the retail giant has previously hinted at plans to penetrate the Big Apple, chairman/CEO Richard Schulze told TWICE that Best Buy will be "opening stores in the New York market next year."
The millennium move will come a year ahead of schedule, Schulze said, but won't necessarily include a Manhattan site. Rather, the nation's largest CE retailer has been shopping real estate in the outer boroughs and nearby New Jersey that can better accommodate the store's big-box format.
The new stores will be readily serviced by Best Buy's Ohio warehouse/ distribution center, he said.
While the mega-merchant has been encroaching the metropolitan area with locations in Princeton, N.J., and upstate New York, the City That Never Sleeps remains one of the last major U.S. markets with no Best Buy presence. Its entry there next year will put it head to head with No. 2 rival Circuit City and local powerhouses The Wiz, P.C. Richard and Tops Appliance City.
Schulze's comments came earlier this month during a Photoimaging Manufacturers & Distributors Association dinner in New York, where he received a Leadership Award. In an address on digital products the Best Buy founder sang the praises of DVD, which he described as "the fastest-growing new technology since the introduction of the video cassette recorder."
Although DVD players "exploded off the shelf at $299," he anticipates vast market share gains after the product hits an expected $199 price point by year's end. He also suggested that recordable DVD units may be introduced as early as this fall and will ignite a "whole new cycle that's not wildly dissimilar from what VCR was."
But Schulze saved his highest accolades for digital TV, which he dubbed "the granddaddy" of all digital technology. "In my 30 years in business," he said, "no other product means as much to the business as a whole financially" or to consumers' willingness to make a substantial capital investment in home entertainment.
Schulze said suppliers are giving "strong consideration" to bringing the price of DTV down faster than usual for the rollout of a new technology product because of expected acceptance by virtually all American households. Meanwhile, he also predicted that a digital TV "bridge product" will hit the market later this year for less than $3,000, while set-top boxes will rapidly fall below $500.
On the e-commerce front, Schulze said that Best Buy will be moving "much more aggressively" in adding incremental product offerings now that new Internet division head John Walden is in place. Their ultimate success, Schulze said, will be based on their ability to leverage the credibility associated with the Best Buy brand, although the store must first finalize agreements with manufacturers and refine its distribution system to accommodate direct-to-consumer shipments.
In other Best Buy news, the superstore is continuing its four-month-old feud with Apple over purchasing and inventory requirements for the hot-selling, multicolored iMac line.
Apple requires retailers to purchase the computers in pallets of eight, half in best-selling blueberry. According to a Best Buy spokeswoman, the store has not stocked any iMacs since the original teal-colored units sold out several months ago, though talks between the two companies continue. Best Buy's stance leaves CompUSA as the sole nationwide retailer carrying Apple products. - Additional reporting by Doug Olenick